The second chart explains why. It shows the median Australian apartment price in Australian dollars, compared with the median Australian apartment price in Chinese yuan.

As apartment prices climb inexorably higher for Australian buyers, the lower Australian dollar means prices have actually fallen in real terms for Chinese buyers since around 2011.

“The lower Australian dollar has supported foreign investor demand for Australian housing,” ANZ’s economists wrote. “Tighter lending conditions may see this ease.”

But don’t hold your breath. ANZ said tighter borrowing criteria and increased taxes on foreign buyers “could see reduced demand from foreign buyers, although as yet there is little hard evidence of this”.

NSW recently introduced a 4 per cent stamp duty surcharge and a 0.75 per cent land tax surcharge on foreign buyers. Victoria has increased its stamp duty for foreign buyers from 3 per cent to 7 per cent, while Queensland has introduced a 3 per cent stamp duty.

“We continue to expect that demand for housing will ease from here, driven by tighter lending standards, especially for property developers and foreign buyers,” ANZ wrote.

“Easing demand is expected to see price growth slow from hereon. From a peak of 12.8 per cent year-on-year in September 2015 and 8.1 per cent currently, we expect national house prices to rise by 6.4 per cent and 1.7 per cent in 2016 and 2017 respectively.”

In June, UBS economists noted that the “willingness to lend against foreign income reportedly tightened this year”.

“This is leaving lingering worries over the prospect of ‘settlement risk’, particularly as high-rise apartments will have record completions in coming years,” UBS wrote.

“However, this is likely to be an issue if prices fall substantially between when the deposit was paid and when settlement is due.”

Importantly, though, UBS points out that the share of Chinese borrowing for house purchases is very low at around 5 per cent, suggesting the risk “may be somewhat overstated”.

UBS also described the tax hikes by state governments as a “modest negative, but likely not a game-changer”. “Nonetheless, we think while downside risks dominate, there will also be some upside risk that the secular strength of foreign demand is being under-appreciated,” UBS wrote.

A bigger risk to Chinese demand for Australian property than tighter lending could be a crackdown on money transfers out of China.

In the same report, UBS warned the “fat tail of a bad outcome remains” if China sharply tightens capital flows.

Earlier this week, the Chinese government announced that more than 450 suspected operators of underground banks had been arrested this year in relation to nearly $40 billion ($HK234 billion) in illegal overseas transfers, the South China Morning Post reported.

Under current regulations, mainland Chinese individuals can change up to $65,400 ($US50,000) in foreign currencies per year, fuelling demand for ways to skirt the limits as investors, fearing a falling yuan, seek to stash capital in overseas markets.

“Underground money shops are a scaled business now in China, and there are hundreds, if not thousands, of shell companies with the sole purpose of getting money out of China,” Renmin University finance professor Zhao Xijun told the paper.

The shops operate in effectively the same way as legal peer-to-peer foreign exchange marketplaces such as CurrencyFair or TransferWise.

According to China’s Ministry of Public Security, suspects would transfer money out of China by asking the client to put the funds in a domestic account, with an agent overseas instructed to inject an equivalent amount into an overseas account specified by the client, depending on the exchange rate.

Chinese official Luo Yonglong, deputy director of supervision with the State Administration of Foreign Exchange, told the South China Morning Postthe use of underground banks had created a monetary “black hole” that undermined government economic policy.

“The damage is obvious,” Luo said.

It comes as new data shows housing prices are still rising and auction clearance rates are sky high — but the real test of the market’s resilience is still to come.

Supply of homes on the market typically ramps up ahead of the Christmas/New Year break.

The latest weekly figures show 77.8 per cent of auctions in Australia’s mainland state capitals last week ended with a sale: the highest clearance rate since June 2015.

That was driven by the two major markets, with Sydney and Melbourne both boasting clearance rates of around 80 per cent, according to the CoreLogic property market figures.

But despite the apparent surge in demand signalled by the higher clearance rates, prices across the five mainland state capitals rose just 0.1 per cent for the week.

The average price was up by 5.9 per cent from a year earlier, the first time below six per cent for nearly three years, the figures showed. The bellwether market of Sydney led the pack with a 9.1 per cent gain over the past year, with Melbourne not far behind at 6.7 per cent.

Those figures are much slower than this time last year, when annual growth in the five-city average was 11.3 per cent, the Sydney market was up by 17.7 per cent and Melbourne was up by 12.3 per cent.

What’s more, the volume of homes being taken to market is lower. There were 1,444 properties listed for auction last week, down by a whopping 32 per cent from 2,118 on the corresponding week of last year.

Even taking the higher clearance rate into account, that still means a sharp drop of about 29 per cent in the number of homes sold.

And the seasonal glut of homes has yet to hit the market: last year, between mid-August and early December, the number of homes going under the hammer rose by 76 per cent.

The test of the market’s resilience is not how it copes with the relatively small number of auctions held in late winter, but whether it stands up to the seasonal flood of supply — set to peak a little over three months from now.